TKR
The Timken Company
$141.75
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 49.8% above fair value
You pay
$141.75
Bear
$75.69
Fair
$94.61
Bull
$113.54
Bear
$75.69
-46.6%
$5.21 × 12x P/E
Fair
$94.61
-33.3%
$5.21 × 15x P/E
Bull
$113.54
-19.9%
$5.21 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
27.2x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $144.00 from 24 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $94.61 per share.
Warnings
Dividend-based valuation: $29.71 (below our primary estimate by 62%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $144.00 (from 24 analysts). Our estimate is 46% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples